Mortgage Applications for New Home Purchases Increase in August

WASHINGTON, D.C. (September 15, 2016) – (RealEstateRama) — The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for August 2016 shows mortgage applications for new home purchases increased by 5 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

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“Applications for new home purchase mortgages were up in August on an unadjusted basis following a sluggish July,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “New home purchase applications increased 5 percent over the month and increased more than 14% compared to August a year ago. Based on the applications data, our estimate of seasonally adjusted new home sales for August reached 601,000 sales, the highest level observed in our survey since it began in 2012. While our new home sales estimates have trailed the recent Census data, the increase in our series in August, which derives from a different source of data compared to the Census, provides some corroboration that single family building activity has remained strong even as the summer winds down. Our sense is that builders have been attempting to catch up with demand in the face of labor shortfalls and other limiting factors in various parts of the country.”

By product type, conventional loans composed 67.7 percent of loan applications, FHA loans composed 18.4 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.2 percent. The average loan size of new homes decreased from $325,843 in July to $325,224 in August.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 601,000 units in August 2016, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for August is an increase of 11.3 percent from the July pace of 540,000 units. On an unadjusted basis, the MBA estimates that there were 48,000 new home sales in August 2016, an increase of 6.7 percent from 45,000 new home sales in July.

MBA’s Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

For additional information on MBA’s Builder Applications Survey, please click here.

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Ali Ahmad

(202) 557- 2727

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.

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Mortgage Bankers Association
1331 L Street, NW
Washington, DC 20005

Phone: (202) 557-2700

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